Stocks close 1 per cent stronger

The local market has rebounded strongly in Friday’s session, despite losing ground across the week.

The Australian sharemarket has seen red for a fifth straight week despite a strong rally through Friday trade.

At the end of the session, the benchmark S&P/ASX 200 index had surged 56.8 points, or 1.08 per cent, to 5,296.7, while the broader All Ordinaries index bounded 59.6 points, or 1.12 per cent, to 5,396.7.

Monday’s 2.2 per cent skid prevented the market from a positive week, with the losing run of five weeks the longest such streak in two years.

A run of three straight gains to round of the week has, however, calmed nerves heading into Thursday’s crucial US Federal Reserve policy update.

IG chief market strategist Chris Weston foresees just a 5 per cent chance of a US rate hike next week, but the focus will shine bright on commentary from central bankers in the US, Japan and even Australia, where minutes of the latest RBA meeting are due.

“The bigger question remains what will the Fed say next week and what will the BoJ do (or not do), in what promises to be a crazy 24 hours of central bank watching,” he said.

CMC Markets chief market analyst Ric Spooner said the Friday rally came in the hope the Fed adopts the dovish tone that investors have become so accustomed to over the past decade.

“Assuming the Fed rate hike is deferred, this creates risk that events might conspire to mean that it does not happen in December either. With bond markets consolidating, stock markets are reacting to the short term risk that they have overshot to the downside,” he said.

The dampened prospects of US rate hikes helped drive oil prices up to the benefit of beaten-down energy stocks.

Santos bounced 2.1 per cent off a five-month low to $3.48, Origin recovered 0.6 per cent to $4.93 and Woodside lifted 1.3 per cent to $27.43.

The big miners were also well supported despite a mixed showing from base metals, with BHP Billiton inching up 0.1 per cent to $20.09 and Fortescue advancing 1.3 per cent to $4.76.

Rio Tinto bucked the trend in sliding 1 per cent to $46.60.

Financials were crucial to the market ending the day near session highs as a lacklustre start turned into solid 1 per cent gains for the big four.

ANZ led the way with a 1.1 per cent jump, while the other three giants in Westpac, NAB and CBA all added 1 per cent.

In retail, Coles owner Wesfarmers climbed 0.5 per cent, Woolworths tacked on 0.1 per cent and Myer rallied 2.4 per cent as analysts largely responded positively to its profit result yesterday.

JB Hi-Fi leapt 5.3 per cent as investors applauded its $870 million purchase of The Good Guys and the consequent well-received institutional raising.

Among other blue chips, Telstra gained 1.6 per cent to $5.10, while Qantas dipped 1.2 per cent to $3.21.

Elsewhere, Estia Health surged 3.6 per cent as shareholders welcomed news the troubled aged care group’s chief executive Paul Gregersen had stepped down, while shipbuilder Austal slid 1.9 per cent despite detailing a new $434m contract with the US Navy.

Meanwhile, the Australian dollar ended the local session steady around US75.1c, scarcely moving through the day after a strong bounce in offshore deals.